Real earnings growth is nominal earnings increase minus inflation

Steps:

• Calculate real earnings growth for each country: % change in earnings minus % change in consumer prices (CPI).
• France: earnings +3%, CPI +2% → real +1%.
• Germany: earnings +2%, CPI +1% → real +1%.
• Japan: earnings +1%, CPI +0% → real +1%.
• UK: earnings +4%, CPI +2% → real +2%.

Why D is correct:

• UK shows the highest positive difference (+2%), per the real income formula: real growth ≈ nominal growth - inflation rate.

Why the others are wrong:

• A: France's +1% real growth ties for lowest increase.
• B: Germany's +1% real growth ties for lowest increase.
• C: Japan's +1% real growth ties for lowest increase.

Final answer: D